The Summary

XRP is a digital asset built for payments and was developed by Ripple Labs. It is the native digital asset on the XRP Ledger—an open-source, permission-less and decentralized blockchain technology. XRP is developed as a currency for powering the Ripple network. XRP is proposed to be used as a bridge currency for financial institutions to exchange value between multiple fiat currencies or networks and is focused on increasing the speed and reducing the cost of transferring money between institutions.

The Problem

Ripple was launched as a solution to the snags in the current financial system. Delay in transactions, the high cost of cross-border remittances are the drawbacks XRP is majorly focused to solve. The problems in the current payment system are grouped by Ripple in 3 ways - Correctness, Agreement, Utility.

Correctness:

Refers to the capability of the payment network to identify and differentiate between correct and fraudulent transactions. The traditional system relies on the trust between two different institutions.

Agreement:

Refers to the lack of common protocols or set of rules to be maintained through the banking system, which invariably leads to double spending and other fraudulent transactions.

Utility:

Refers to the inefficiency of the current traditional payment system to make transactions faster and thrifty.

Below listed are some of the fundamental problems identified in the traditional payment system,

1. Cross-border remittance or international transactions are usually slow and expensive.
2. Reduced latency, better speed, and improved security are still ongoing development processes in the existing payment transaction. Latency refers to the time delay for a transaction to complete.
3. To transfer money, the current banking system uses slow and outdated mode of transactions like SWIFT and wire transfer, which usually takes several hours to days.
4. Transfers are sometimes carried out with the interference of multiple banks as not all banks are not in the same network or connection.
5. Currency conversions are usually exorbitant. Fees have to be paid to every intermediary institution in the middle.

The Solution

Correctness: Transactions in the network will be approved only if 80% of the nodes agree with it, thus, vouching for the fair transactions only to go through.

Agreement: Maintains a single global truth set of transactions to avoid double-spending. The rules are the same no matter what part of the globe you are from. So, no confusion.

Utility: Network will make sure consensus is reached in a finite time.

1. Ripple’s network aims to provide financial institutions with quick and cost-efficient cross-border transactions.
2. The idea behind Ripple is to provide an alternative system to the traditional payment system. To create a blockchain protocol for inter-bank settlements.
3. Ripple network assures that the payments moving across the XRP ledger settle typically in less than 5 seconds.
4. Ripple network is scalable and handles over 1,500 transactions per second.
5. XRP can be used as a liquidity tool for cross-border transactions and payments. A liquidity tool refers to an asset that can be converted to another asset without affecting its market value.

The Team

Founded in 2012 by Chris Larsen and Jed McCaleb, Ripple (Formerly known as Opencoin) is a technology company that develops the Ripple payment protocol. Currently, Brad Garlinhouse is the CEO of Ripple Labs and 8 other board of Directors.

More on the team can be read here

The Tokenomics

XRP is used as a p2p native currency within the network. XRP's primary use is to be a bridge currency for financial institutions, exchanging value between multiple fiat currencies.

• The total supply of XRP tokens is 100 billion.
• All tokens are pre-mined, meaning all tokens are created before launching the ICO(Initial Coin Offering).
• XRP tokens are used to pay the fees in the network, which are then burned. Burning is the process of removing the tokens permanently from circulation.
• The circulation supply of XRP in the network is designed to be deflationary, through the process of burning.
• Ripple escrows 55billion XRP tokens in a cryptographically-secured account. Escrow refers to the process of holding assets till a condition on the contract is met.
• Ripple’s network is set to release 1 billion XRP tokens every month to manage the supply.

The Roadmap

No roadmap was found in the whitepaper.

You may read about some of XRP(Ripple)’s important dates in the past here

In Conclusion

XRP currently has a market cap of $40 billion with over 48 billion tokens in circulation. Ripple faces major centralization risk as over 50 billion XRP is owned by Ripple INC. The company has made major progress in the last few years with several partnerships and announcements.